Choosing the category for a new consumer brand
The Founders work group applies lessons from Notion, LinkedIn, Justin.tv, Pinterest and Coda to physical products.
Updated
Look for a need people already recognize, evidence that they act on it, and economics that work across the whole purchase cycle.
- Start from a need people already recognize. Ivan Zhao would look for a category where people buy repeatedly, have a specific frustration with what exists and can describe a better product in their own words. Product, distribution and unit economics have to work together.
- Watch what customers do. Reid Hoffman would ask what you know about customer behavior that established brands have missed. Then he would put an early version in customers' hands and watch them choose, open, use and buy it again.
- Find people doing extra work. Emmett Shear points to gaming, about 1 or 2% of Justin.tv, where people were already streaming StarCraft with screen-capture software. He would talk to the people making those workarounds before choosing the product or the brand story.
- Weigh planning against purchase frequency. Ben Silbermann would give strong discovery demand a chance to make up for rare purchases if people return again and again while planning, as Pinterest users did for weddings. Each sale then has to pay for discovery and trust. Shishir Mehrotra would compare categories across the full cycle of customer value and favor the one where he can name why existing brands left the opening.
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Frequently Asked Questions
What are the signs of product-market fit?
A small group who would be upset to lose the product, then growth you can explain, from users who look like the market you want to win. Fit rarely arrives as one moment.
How is early traction different from product-market fit?
Traction responds to a launch, press or founder effort and fades when that stops. Fit keeps compounding through the product's own loop, and the love repeats with strangers who match the first fans.
What should you do when product-market fit isn't coming?
Make the next attempt a bounded test with a target and a deadline the cash can cover, check that the test was fair, and change course on a miss. With no promising group or runway left, return the capital.
How do you pressure-test a startup idea?
Set a behavior bar before the team gets attached, put an early version into someone's real work, and write down the ways the company could fail even if early users love it.
When should a founder drop an idea?
When people who have the problem can find the product, try the full version and still don't come back. Low signups and investor doubt alone are weak reasons to quit.
How do founders find a problem worth solving?
Start from a problem you will care about for years, find people whose behavior shows they have it too, and know why you can make progress where others see risk.
What should a first-time founder do first?
Start, choose a cofounder with care and get something in front of strangers early. The group splits on whether research or a rough product comes first.
How do you size a market before building?
Start from a behavior people already have, ask what has kept anyone from winning the market, and let growth or repeat use tell you its size.
How does a startup stand out in a crowded market?
Pick one experience people return to, start with the people whose choice brings everyone else, and check whether users come back for a second job.
Where can an AI startup win against the model companies?
Around what takes sustained work to copy: a group's accumulated taste, a team's workflow, trust between people or a creator's audience.
How do you validate an idea with customers?
Go out to learn, ship one thing worth a stranger's time, watch who comes back on their own and then ask them why.
